COVID-19, School Closings and Labor Market Impacts

In February 2008, some schools in southeastern Kentucky shut down for three to four days due to a seasonal influenza outbreak. A Centers for Disease Control and Prevention study—which randomly sampled households whose children’s schools were closed during this period—found that an adult had to miss work to provide child care in 29.1% of households.“Impact of Seasonal Influenza-Related School Closures on Families—Southeastern Kentucky, February 2008.” Centers for Disease Control and Prevention Morbidity and Mortality Weekly Report, Vol. 58, No. 50, 1405-09.

Now, the nation is facing a similar (albeit much more severe) situation. Coronavirus-related school closures are expected to last for the remainder of the school year in many states. Thus, it is likely many full-time workers will drop out of the labor force to take care of their children.

Full-Time Workers with Young Children at Home

The table below reports the average share of full-time workers from 2015 to 2019 with at least one young child at home, broken out by income and household work arrangements. The income groups refer to individual income in 2019 dollars, and we considered “young” children to be those who are less than 9 years old.

We found that 20% of all full-time workers have a young child at home. Within this group:

• 12% have no spouse.
• 39% have a spouse who does not work full time.
• 49% have a spouse who works full time.

Workers without a spouse or with a spouse who works full time are at the highest risk of missing work time to care for children.

Single Workers and Young Children

Unmarried workers are the least likely to have young children at home, but those in this group with the lowest household income are twice as likely to have a child at home as those in the highest income group. This is problematic. These workers are more likely to have lower savings and to be in hourly jobs requiring on-site work.Gascon, Charles; and Ebsim, Mahdi. “How Many Employees Are Prepared to Work from Home?” St. Louis Fed On the Economy, March 23, 2020. Leaving work or reducing hours may be offset by unemployment insurance payments, although a prolonged period of being out of work could make reentry difficult.

Working Spouses and Caring for Children

Workers with spouses working full time are a more homogeneous group, with 24% to 26% having young children at home. Although workers in this category may also lack savings, they might have the ability to rely on their partner’s income or share child care responsibilities.

While the economic burden on these households might be less severe, the aggregate economic cost may be higher as this group comprises 10% of all full-time workers versus the 2% that those with no spouse and young children make up. A reduction in these workers’ labor supply would cause a significant drop in aggregate hours worked, resulting in a short-term reduction in U.S. output.This reduction in labor supply may be at least partially alleviated by other unemployed workers filling these vacancies.

Effects of Unemployment Insurance

Many states are explicitly expanding unemployment insurance (UI) eligibility to those who are not working because of school closures, recognizing that these closures could be affecting employment. These policy changes—along with the recent increases to UI benefits under the federal Coronavirus Aid, Relief and Economic Security (CARES) Act—will help offset many workers’ losses. However, these benefits also provide incentives for workers to remain unemployed longer than they may have otherwise.

Longer-Term Effects of School Closings on the Economy

Besides the immediate impact of school closures on parent working hours, there are other longer-term implications for the U.S. economy:

• Even parents who are able to work remotely may be less productive with young children in the house.
• The gender income gap could be further exacerbated if two-earner households are forced to choose a caretaker.Alon, Titan M.; Doepke, Matthias; Olmstead-Rumsey, Jane; and Tertilt, Michéle. “The Impact of COVID-19 on Gender Equality.” Working Paper, 2020.
• Children across the nation would be getting less education if online class is less effective.
• Education inequities could increase as higher-income families and schools may have more resources to educate their children in alternative ways.

Notes and References

¹ “Impact of Seasonal Influenza-Related School Closures on Families—Southeastern Kentucky, February 2008.” Centers for Disease Control and Prevention Morbidity and Mortality Weekly Report, Vol. 58, No. 50, 1405-09.

² Gascon, Charles; and Ebsim, Mahdi. “How Many Employees Are Prepared to Work from Home?” St. Louis Fed On the Economy, March 23, 2020.

³ This reduction in labor supply may be at least partially alleviated by other unemployed workers filling these vacancies.

⁴ Alon, Titan M.; Doepke, Matthias; Olmstead-Rumsey, Jane; and Tertilt, Michéle. “The Impact of COVID-19 on Gender Equality.” Working Paper, 2020.

Additional Resources

• St. Louis Fed’s COVID-19 resource page
• On the Economy: The Impact of COVID-19 on Labor Markets across the U.S.
• On the Economy: COVID-19 and Unemployment Risk: State and MSA Differences